Building smart – the future of real estate is digital

Real estate developers have an opportunity to become smart service brokers, says Salpeas.

Published: 5 August 2018 - 9:05 a.m.

Smart cities built on digital technologies
are having a profound effect on the real estate world and buildings as we know
them are changing. And there is good reason to: according to the UN, by 2030
two-thirds of the world's population will live in cities, and Dubai has the opportunity
to lead the way through state-of-the-art smart city initiatives. So, what has
changed already and what further changes can we expect to see?

I envision a world where homes and
workplaces will become tailored to the way we now live and our digitally-empowered
daily routines. In Dubai, the smart cities initiative has already seen city infrastructure
begin to transform, using digital solutions and tools to address civic issues
like public services, parking, street lighting, utilities and resource management
via smart meters and we are now even seeing plans for autonomous vehicles for
mass public transport. But in real estate, residential housing and commercial offices,
developers are going to see growing demand for smart homes and offices - for
developers this is an opportunity to add value through smart solutions and
services.

New technologies, new types of developer

As in many other industries, digital
technologies have disrupted traditional ways of doing things, but real estate
is still really evaluating how it can maximize the benefits of digital
technologies and smart solutions; how can developers best serve both the
residential communities and businesses that set up in their new buildings and
developments.

Different end-users have different demands
of technology. You might for example have a villa in a Dubai development and
expect to have a facilities management company on hand to provide you with
smart home services (such as a platform offering services, security, waste and
energy management?) - real estate companies should now think about branching
into offering that kind of solution. Real estate developers could in effect
become white-listed companies offering facilities management that residents are
demanding.

By extension, real estate developers could
also consider applying this thinking to commercial properties and offices -
digital tools can give them the ability to offer security services, facilities
management and more to office buildings and business premises. In short, services
that were not previously monetised by developers and real estate companies
could now become so thanks to digital technologies. Some developers have
already recognised this and got started - they are using smart management
platforms that enable them to work as ‘service brokers', connecting residents (or
businesses?) to potential service providers.

Smart real estate initiatives already
underway

The government of Dubai has now created a
roadmap that comprises over 500 smart initiatives and services spread out over eight
government entities and two smart districts. The infrastructure for this
roadmap is extensive and has required investment of around $8 billion. The
first stage of these initiatives has been designed to focus on connectivity and
technological infrastructure, including programs such as Smart Governance.

The next state of the roadmap targets Smart
Living, an area which holds huge potential for the construction and real estate
development industry, in which fast internet connectivity from homes, mobile
phones or workplaces creates secure access to city services and confidence in transacting
online. The government has recognised that the role of real estate developers
and construction companies is a vital one in delivering on smart city projects.
Among the forward-thinking smart city projects planned for Dubai is the Desert
Rose Housing Project - a smart and sustainable satellite city project for
160,000 residents powered by roof top solar panels generating 200 megawatts of
electricity.

What other tech trends can we expect in
real estate?

Artificial intelligence is on the rise in
most industries, and real estate is no different. IDC predicts that 75% of real estate developers will use AI technology for at least one
business application or service in 2018. And just as AI-powered virtual
customer service agents and chatbots have been deployed in other industries to
help field questions and automate discussions with customers, freeing up human
time to perform more complex tasks, AI ‘employees' can free up human agents to
provide hands-on, high-quality customised customer care in real estate.

In a similar way to IoT solutions, AI can
help real estate companies drive improved operational efficiencies for both facilities
and building management. AI tools could help Dubai's real estate companies
manage large numbers of properties effectively and technology-savvy real estate
companies will be leveraging digital technologies to give themselves a competitive
edge: as in almost every other industry today, it is customer experience that
is driving success and satisfaction, and real estate will be no different.

Smart technologies are already present for
Dubai residents in the shape of things like smart parking in housing
developments, but as we move forward I expect to see real estate developers get
fully on board with Dubai's smart cities agenda and begin mining the value in
managing the user experience. To do this they will also need to understand the
financial potential of being a service broker, so that moving forward they
start issuing tenders to procure the right IT platforms that enable them to
work in that capacity. By improving customer service for tenants, reducing
complaints and increasing resident satisfaction using digital technologies and
smart city thinking, real estate developers will be able to disrupt their own
market, transform themselves and thrive in Dubai's next era.

Spyros Salpeas is Head of Digital
Innovation and Key Customer Programs MEA, Orange Business Services.